exhibit10-25.htm


     

    EXHIBIT
10.25


    


    SEVENTH
AMENDMENT TO FORBEARANCE AGREEMENT

    AND

    EIGHTH
AMENDMENT TO LOAN AND SECURITY AGREEMENT

    


    This
Seventh Amendment to Forbearance Agreement and Eighth Amendment to Loan and
Security Agreement (the “Amendment”),
is entered into as of December 15, 2009, by and between SQUARE 1 BANK (the
“Bank”) and
CLEARONE COMMUNICATIONS, INC., NETSTREAMS, INC. and  NETSTREAMS, LLC
(collectively, “Borrower”).

     

    RECITALS

     

    Borrower
and Bank are parties to that certain Loan and Security Agreement dated as of
November 12, 2008 (as amended from time to time, with related documents,
including that certain Joinder to Loan and Security Agreement dated as of
November 3, 2009, the “Loan Agreement”).
Borrower and Bank are parties to that certain Forbearance Agreement and First
Amendment to Loan and Security Agreement, dated as of March 31, 2009 (as amended
from time to time, the “Forbearance
Agreement”).  The parties desire to amend the Loan Agreement
and the Forbearance Agreement in accordance with the terms of this
Amendment.

     

    Now,
therefore, the parties agree as follows:

    


    
      	
              1)  

            	
              Borrower
      is in violation of the monthly reporting requirements, as set forth in
      Section 6.2(a) and Section 6.2(b) of the Loan Agreement, for the reporting
      period ending October 31, 2009 (“October Reporting Violation”), and has
      informed Bank that it anticipates also being in violation of such monthly
      reporting requirements for the reporting period ending November 30, 2009
      (“November Anticipated Reporting Violation”). Bank hereby waives the
      aforementioned October Reporting Violation and November Anticipated
      Reporting Violation.

            


    

    


    
      	
              2)  

            	
              Section
      3 of the Forbearance Agreement is hereby amended and restated, in its
      entirety, as follows:

            


    

    


    
      	
               
      

            	
              3.

            	
              Forbearance.
      Borrower acknowledges the existence of the Existing Default under the Loan
      Agreement.  Borrower further acknowledges and agrees that Bank
      is not in any way agreeing to waive such Existing Default as a result of
      this Agreement or the performance by the parties of their respective
      obligations hereunder or thereunder.  Subject to the conditions
      contained herein and performance by Borrower of all of the terms of this
      Agreement and the Loan Agreement after the date hereof, Bank shall, until
      the earliest of (i) January 15, 2010, or (ii) such date that there shall
      occur any further Event of Default (the “Forbearance
      Period”), forbear from exercising any remedies that it may have
      against Borrower as a result of the occurrence of the Existing
      Default.  Such forbearance does not apply to any other Event of
      Default or other failure by Borrower to perform in accordance with the
      Loan Agreement or this Agreement.  This forbearance shall not be
      deemed a continuing waiver or forbearance with respect to any Event of
      Default of a similar nature that may occur after the date of this
      Agreement.

            


    

    


     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              3)  

            	
              The
      following definition in Exhibit A to the Loan Agreement is hereby amended
      and restated, in its entirety, as
follows:

            


    

     

    “Term Loan Maturity Date” means
January 15, 2010.

    


    
      	
              4)  

            	
              Unless
      otherwise defined, all initially capitalized terms in this Amendment shall
      be as defined in the Loan Agreement or the Forbearance
      Agreement.  The Loan Agreement or the Forbearance Agreement, as
      amended hereby, shall be and remain in full force and effect in accordance
      with its respective terms and hereby is ratified and confirmed in all
      respects.  Except as expressly set forth herein, the execution,
      delivery, and performance of this Amendment shall not operate as a waiver
      of, or as an amendment of, any right, power, or remedy of Bank under the
      Loan Agreement or Forbearance Agreement, as in effect prior to the date
      hereof.  Borrower ratifies and reaffirms the continuing
      effectiveness of all agreements entered into in connection with the Loan
      Agreement or Forbearance Agreement.

            


    

     

    
      	
              5)  

            	
              Borrower
      represents and warrants that the representations and warranties contained
      in the Loan Agreement or Forbearance Agreement are true and correct as of
      the date of this Amendment.

            


    

     

    
      	
              6)  

            	
              This
      Amendment may be executed in two or more counterparts, each of which shall
      be deemed an original, but all of which together shall constitute one
      instrument.

            


    

     

    
      	
              7)  

            	
              As
      a condition to the effectiveness of this Amendment, Bank shall have
      received, in form and substance satisfactory to Bank, the
      following:

            


    

     

    
      	
              (a)  

            	
              this
      Amendment, duly executed by
Borrower;

            


    

     

    
      	
              (b)  

            	
              payment
      of all Bank Expenses, including Bank’s expenses for the documentation of
      this Amendment and any related documents, which may be debited from any of
      Borrower's accounts; and

            


    

     

    
      	
              (c)  

            	
              such
      other documents and completion of such other matters, as Bank may
      reasonably deem necessary or
appropriate.

            


    

     

    


    


    


    


    


    


    


    


    


    


    


    


    


    


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    IN
WITNESS WHEREOF, the undersigned have executed this Amendment as of the first
date above written.

     

    


    
      	
              CLEARONE
      COMMUNICATIONS, INC.

               

               

              By: 
      /s/ ZEYNEP HAKIMOGLU

              Its: 
      President & CEO

               

               

              NETSTREAMS,
      INC.

            	
              SQUARE
      1 BANK

               

               

              By: 
      /s/ TOMMY DEAVENPORT

              Its: 
      SVP - Regional Manager

            
	
               

               

              By:  /s/
      NARSI NARAYANAN

            	 
      
	
              Its: 
      Director

            	 
      


    

    


    


    NETSTREAMS,
LLC

    


    


    By:  /s/
NARSI NARAYANAN

    Its: 
Member Representative

    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    


    [Signature
Page to Seventh Amendment to Forbearance Agreement and

    Eighth
Amendment to Loan and Security Agreement]

    
 

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